H1 2017 Business Result
H1 2017 business result is prepared for investors consideration only before completion of independent auditors review. Therefore, parts of contents on this material could be changeable during independent auditors review. 1
Contents I. H1 2017 Overview II. Market analysis III. Performance analysis IV. Financials - Income Statement V. SYMC s Focus in H2 2017 2
H1 2017 Review Market Domestic total market decrease : 3.4% (vs. H1 2016) due to tax support during H1 2016 SUV market decrease : 7.6% in spite of growth in SUV-B & E segments - SUV-B : +12.5%, SUV-E : +21.0% Overseas : Growth in Europe & China Currency Unfavorable F/X movements (Q2 2017 USD/KRW Avg.: KRW 1,129/USD, -2.9% yoy) 1,670 1,473 1,436 1,429 1,443 1,313 1,251 1,247 1,230 1,243 1,121 1,157 1,163 1,154 1,129 1,076 1,095 1,058 1,015 1,017 Q2 2016 Q3 2016 Q4 2016 Q1 2017 Q2 2017 USD/KRW EUR/KRW JPY/KRW GBP/KRW Q2 2017 vs. Q2 2016 Chg. % vs. Q1 2017 USD/KRW -2.9% -2.2% EUR/KRW -5.4% +1.1% JPY/KRW -5.5% +0.2% GBP/KRW -13.6% +1.0% SYMC Vehicle sales SYMC H1 domestic growth : 5% driven by G4 Rexton (5,411 units) - Market share grows from 5.4% to 5.9%. Export : Steep decline due to Iran, Peru, Egypt, etc. Tivoli brand portion in the small SUV market in H1 2017 : 53%
Domestic Market Trend Quarterly market trend (Including imported cars) 28.4% 27.4% 29.0% 454K 62K 35K 129K 228K Q2 2015 PC SUV MPV Commercial SUV M/S 446K 56K 33K 122K 234K Q3 2015 531K 60K 33K 154K 283K Q4 2015 27.0% 424K 59K 28K 115K 223K Q1 2016 Unit: vehicles (Imported cars PC, SUV, MPV) 28.9% 28.4% 28.8% 510K 65K 30K 147K 267K Q2 2016 391K 48K 27K 111K 204K Q3 2016 499K 59K 31K 144K 265K Q4 2016 26.7% 26.9% 429K 61K 30K 115K 224K Q1 2017 474K 65K 31K 128K 250K Q2 2017 4 Q2 2017 (vs. Q2 2016) - Total market : -7.1% (Domestic makers: -8.7%, Imported: +4.0%) - PC : -6.4%, SUV : -13.5%, MPV : +1.5% - SUV M/S : 26.9% (-2.0%p vs. Q2 2016) - SYMC Market share in SUV market: +4.1%p Q2 2016 : Q2 2017 = 17.9% : 22.0% - SYMC Market share in total market: +0.6%p Q2 2016 : Q2 2017 = 5.5% : 6.1% H1 2017 (vs. H1 2016) - Total market : -3.4% (Domestic makers : -4.1%, Imported : +1.2%) - PC: -3.0%, SUV: -7.6%, MPV: +1.8% - SYMC Market share in SUV market: +3.1%p H1 2016 : H1 2017 = 18.1% : 21.2% - SYMC market share in total market : +0.5%p H1 2016 : H1 2017 = 5.4% : 5.9%
Domestic SUV Market Trend Vehicle sales by segment Portion by segment 250 215K -9% 196K 200 48K +13% 54K 100% 90% 80% 22% +5%p 27% 150 100 50 0 64K 87K 16K -27% -13% +21% 47K 76K 19K 70% 60% 50% 40% 30% 20% 10% 0% 30% -6%p 24% 41% -2%p 39% 7% +3%p 10% Total SUV market : -8.7% SUV-B segment : +5%p SUV-B segment : +12.5% SUV-E segment : +3%p SUV-E segment : +21.0% Unit : Vehicle, % Excluding imported car & pick-up ( ) : Example SUV-B SUV-C SUV-D SUV-E (Tivoli) (Korando C) (G4 Rexton) 5
Overseas Market Trend Europe (28 Countries) Russia Jan.~May 2016 4,164K (24.4%) 1,600K 614K 6,547K Jan.~May 2016 290K (37.0%) 203K 15K 549K Jan.~May 2017 4,199K (27.2%) 1,861K 589K 6,850K Jan.~May 2017 282K (41.2%) 238K 15K 577K - Total market : +4.6% - SUV market : +16.3% - Total market : +5.1% - SUV market : +16.8% China Jan.~May 2016 Jan.~May 2017 4,626K 4,490K (31.2%) 3,195K (35.8%) 3,785K 1,044K 872K 10.224K 10,582K - Total market : +3.5% - SUV market : +18.5% Unit : Vehicle Source : Automotive News, Jato Excluding commercial vehicles ( ) : SUV portion out of total market PC SUV MPV Others 6
SYMC Sales Volume in Q2 2017 40,911 12,837 (31%) -12% -45% 36,117 6,998 (19%) Sales volume decrease - Total Sales : -4,794 units (-12%) Domestic : +1,045 units (+4%) Export : -5,839 units (-45%) 28,074 +4% 29,119 (69%) (81%) Q2 2016 Q2 2017 Domestic portion increase : +12%p - Q2 2016 : Q2 2017 = 69% : 81% G4 Rexton - A leading SUV model in SUV-E segment (Market share of 46% in Q2 2017) Domestic Export Unit: vehicle (including CKD) 7
SYMC Sales Volume in H1 2017 74,577-6% 70,345 23,881-29% 16,876 (32%) (24%) 50,696 +5% 53,469 (68%) (76%) Sales volume decrease - Total Sales : -4,232 units (-6%) Domestic : +2,773 units (+5%) Export : -7,005 units (-29%) Domestic portion increase : +8%p - H1 2016 : H1 2017 = 68% : 76% Steady Tivoli sales in domestic market - H1 2017 : 28,624 units (+2% YoY) Domestic Export Unit: vehicle (including CKD) 8
Region-wise Export in H1 2017 W. Europe % out of export sales volume (Including CKD) 50% 52% Asia Pacific Including: China Others 10% 5% South America 21% 17% 19% 26% Others: ME, AF, E. Europe 9
Income Statement(Consolidated) / Q2 2017 Q2 2017 (vs. Q2 2016) (Unit: billion krw) Category Q2 2016 Q2 2017 Change Change(%) Sales 964.0 903.1-60.9-6.3% Cost of sales 796.3 755.5-40.8-5.1% Gross Profit 167.7 147.6-20.1-12.0% SG&A 148.4 154.2 5.8 3.9% Operating Profit 19.3-6.6-25.9 - OP margin % 2.0% -0.7% -2.7%p - PAT 18.0-4.0-22.0-10
Operating Costs / Q2 2017 Q2 2017 (vs. Q2 2016) Cost of sales (%) SG&A expense (%) 82.6% +1.1%p 83.7% 15.4% +1.7%p 17.1% Q2 2016 Q2 2017 Q2 2016 Q2 2017 (Cost of Sales/Sales)*100 (SG&A expenses/sales)*100 11
Income Statement(Consolidated) / Q2 2017 Q2 2017 (vs. Q1 2017) (Unit: billion krw) Category Q1 2017 Q2 2017 Change Change(%) Sales 788.7 903.1 114.4 14.5% Cost of sales 672.7 755.5 82.8 12.3% Gross Profit 116.0 147.6 31.6 27.2% SG&A 131.5 154.2 22.7 17.3% Operating Profit -15.5-6.6 8.9 - OP margin % -2.0% -0.7% +1.3%p - PAT -13.9-4.0 9.9-12
Operating Costs / Q2 2017 Q2 2017 (vs. Q1 2017) Cost of sales (%) SG&A expense (%) 85.3% -1.6%p 16.7% 83.7% +0.4%p 17.1% Q1 2017 Q2 2017 Q1 2017 Q2 2017 (Cost of Sales/Sales)*100 (SG&A expenses/sales)*100 13
Income Statement(Consolidated) / H1 2017 (Unit: billion krw) Category Change Change(%) Sales 1,777.2 1,691.8-85.4-4.8% Cost of sales 1,469.5 1,428.3-41.2-2.8% Gross Profit 307.6 263.5-44.1-14.3% SG&A 280.3 285.6 5.3 1.9% Operating Profit 27.4-22.1-49.5 - OP margin % 1.5% -1.3% -2.8%p - PAT 20.4-17.9-38.3-14
Operating Costs / H1 2017 Cost of sales (%) SG&A expense (%) 84.4% 16.9% 82.7% +1.7%p 15.8% +1.1%p (Cost of Sales/Sales)*100 (SG&A expenses/sales)*100 15
Financial Ratio(Consolidated) / H1 2017 Net Cash Borrowings Ratio Cash Borrowings (Unit: KRW billion) Net Debt : 31 Net Debt : 11 193 184 195 26.1% 24.2% 162 16
SYMC s Focus in H2 2017 Vehicle sales - Domestic G4 Rexton variant model in H2 Tivoli product improvement model (Tivoli Armour) launch in July - Export G4 Rexton launch in H2 Cost control - Profitability priority - SY Auto capital - Cost reduction New car development - KorandoSports FMC in late 2017 or early 2018 - Korando C FMC in 2019 Stable labor management relations - Sound relationship between SYMC management and labor union No production disruption for 8 years Profitability Management 17